Airlines mostly moving on up

There may be some light at the end of the tunnel for global aviation after almost two years of decimation due to the pandemic, stop-start operations and, now, higher fuel costs.

An International Air Transportation Association forecast suggests this year will see air traffic edge towards 2019 levels, particularly on domestic levels, with international travel needing a bit more legroom for recovery. The organisation noted in its forecast report for next year that vaccine roll-outs will continue to play a key role in travel confidence.

All markets are expected to rebound bar African travel, where airlines are expected to post a collective R23.9 billion loss this year, primarily cited due to a slower vaccination roll-out among travellers.

In South Africa, where international travel bans have been implemented and uplifted with mundane regularity, the market remains uncertain. Presently, fewer than 30% of South Africans are fully vaccinated.

FlySafair’s Kirby Gordon is upbeat about industry prospects for next year.

He said: “This fourth wave seems to be ushering in a new era for Covid and we’re hopeful that with vaccination statistics being where they are, we can use 2022 as a year where we really get stuck into rebuilding our industry and the tourism sector in South Africa as a whole.”

Airlink chief executive Rodger Foster is upbeat but annoyed about the constant chopping and changing of regulations that directly impact the travel sector.

“Irreparable damage has been done to South Africa’s travel and tourism sector by the world’s reaction to Omicron. It basically undid all the work that was done to rebuild and repair the industry over the preceding 18 months since the initial lockdown.

“People are cannon-shy and don’t want to make advance bookings, and you cannot blame them, when they don’t know if the rules will change again arbitrarily and at short notice.”

Last week, the department of health changed isolation, quarantine and contact tracing protocols, only to revert to original regulations five days later.

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Nevertheless, Gordon said last year was better than 2020. “Lows were the periods during which we had to thin out our schedule due to low demand, which was scary again. The third wave was a very difficult time for all of us. Having to delay the start of our service to Mauritius until March next year was also a disappointment.

“Highs would have been the period between the third and fourth waves: business was good, and it was great to see the green shoots start to emerge in the industry again.”

Hybrid carrier Lift stepped in December last year and has achieved admirable success, against all odds, on its Johannesburg-Cape Town route. Chief executive Jonathan Ayache is taking a cautious but excited approach to growing the airline’s domestic network this year.

He believed filling the gap between budget and full-service carriers, as a hybrid with a low-cost base and focused on customer experience, Lift’s value proposition is not matched in the market. The airline now operates five daily returns on its route, a 400% growth in frequency since launch.

“While yields could be better,” said Ayache, “our load factors are strong, we expected a fantastic festive season and hope to continue on our positive trajectory.”

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Fly Safair’s festive season traffic has been good and flights, said Gordon, have been fairly full.

“We’ve not been able to command the prices we would ordinarily get at this time of year, which we need to balance out the low season periods,” said Gordon. “It’s also been characterised by a lot of chopping and changing on the part of customers.

“Many folks had overseas trips and cruises that were cancelled and so they had to cancel connecting local flights. Similarly, a lot of those people changed their plans last minute for local trips instead. Also, loads of people not travelling because of concerns around Omicron and folks who test positive and couldn’t fly.”

Over the past two years, SA Express permanently exited the market, while SAA spent an inordinate amount of time in business rescue but has taken to the skies again, on a limited domestic and regional network for now. The Takatso Consortium deal is now six months young and interim chief executive Thomas Kgokolo said in a recent update: “The Takatso Consortium has concluded its due diligence after it was announced as the preferred strategic equity partner and no material issues were identified.”

Kgokolo added that its refreshed codeshare deal to Dubai with Emirates Airlines, to Maputo with LAM Airlines and to Mauritius with Air Mauritius and an inter-line agreement with CemAir have provided greater network flexibility for its customers.

“In the immediate future we are also looking at our cargo strategy,” he said.

Mango’s future still hangs in the balance. Most of its labour pool have taken severance packages, with the balance expected to be retrenched unless an investor is found soon.

Kgokolo said: “The business rescue plan for Mango Airlines has been accepted by 84% of creditors.”

Mango was grounded in July, went into business rescue and taxpayers will soon know whether it found a suitor on the open market.

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